Exclusive distribution (English: Exclusive Distribution) is a term in international trade. Exclusive distribution is one of the strategies that manufacturers may choose to use.
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Exclusive distribution in English is Exclusive Distribution.
Exclusive distribution is a type of distribution where a manufacturer or supplier authorizes only a single distributor in a particular region. Such a distributor becomes the sole authorized seller of one or several of the manufacturer’s products.
Exclusive distribution overview
The function of the distributor is to attract wholesalers and retailers to sell the product to the end consumer. The number of distributors to be appointed depends on each company and their purpose.
When there is an exclusive distribution agreement between a manufacturer and a distributor, the manufacturer is not allowed to sell the product to another distributor. Similarly, a distributor who is given the exclusive right to distribute a manufacturer’s product may not distribute or sell the products of competitors that do business with the manufacturer.
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Businesses often use exclusive distribution
Typically, exclusive distribution is used for high-end products or products with complex technology that require a specialized skill level. Employees may need special training in order to sell goods, for example to sell pharmaceutical products.
In addition, when purchasing goods such as electronics and cars, customers may need specialized, after-sales repair or maintenance services, which can be provided by exclusive distributors.
Industries often choose exclusive distribution
– High-tech electronics companies
– Women’s clothing manufacturer
– Manufacturers of automobiles or large equipment
Manufacturer’s advantage when using exclusive distribution
Oftentimes, exclusive distribution is assigned to agents who are efficient sales units and have strong ties to the local market. Such distributors are often able to increase a supplier’s sales relative to other competitors.
Exclusive distribution helps:
– Keeping the company focused
– Guaranteed to be the distributor of the company’s brand
– Helps the company not to worry about keeping the loyalty of distributors
With exclusive distribution, the manufacturer can exploit other means to increase brand awareness, through advertising and other marketing strategies.
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The strength of exclusive distributors is that they have the financial ability to stock large quantities of products. Furthermore, because exclusive distributors often have substantial amounts of money to pay for products, the manufacturer’s cash position is improved by payments made by distributors to stock products.